FCC backs wireless firms with 5G as Philly, other towns decry subsidies

Verizon and AT&T won big at the Federal Communications Commission on Wednesday as the agency voted to make it easier and cheaper to place 800,000 small antennas for super-fast 5G services on utility poles, traffic lights, sidewalks, and other public areas.

Philadelphia; Santa Barbara, Calif., and other municipalities have blasted the new rules as subsidies to profitable wireless companies through low fees and mandated quick response times for 5G antenna applications that will flood local government offices. A top Philadelphia official said Wednesday that the financial impact from the FCC's action "could be substantial."

The boxy 5G equipment sprouts five-foot antennas on poles or buildings. They will proliferate like weeds throughout the nation over the next decade.

"The rhetoric is that towns want to hold up this new network," John Davis, the manager at Doylestown Borough in Bucks County, which spent about $150,000 fighting 5G antennas proposed there, said Wednesday. "And that's not so at all."

Pennsylvania and other state governments also have passed, or are considering, wireless-friendly legislation to help the companies upgrade their networks with the use of public rights-of-way.

Introduced this summer, proposed Pennsylvania legislation would strip local towns of much of their zoning authority over small-cell antenna placements in public rights-of-way. The measure would be another blow to local towns that would like to retain control over the antennas when they are proposed for historic districts, in neighborhoods without utility poles, or in front of residential homes.

The new FCC rules do not diminish local zoning authority over placement of the antennas but instead set deadlines for towns to process applications and fees. FCC officials warned that local red tape and exorbitant fees would slow 5G for years and cost billions of dollars as town officials look at the antennas as revenue sources.

FCC Commissioner Brendan Carr, the prime backer of the new federal rules, said  Wednesday that the favorable treatment for wireless companies was "about economic leadership for the next decade. Those are the stakes."

Carr compared the potential of 5G to the innovation related to the current 4G wireless network that unleashed the "app economy" and services such as Uber and Lyft in recent years. He also warned that the U.S. was losing out to China in developing a 5G network and that the nation had to close the gap.

Wireless firms and their infrastructure providers, such as Crown Castle, are expected to install the antennas over the next decade in the next wave of wireless-technology upgrades, leading to driverless cars, internet-of-things devices that will automate daily life, and high-speed wireless broadband services to compete with Comcast Corp. and other cable companies.

"At the FCC, we're working hard to ensure that the United States leads the world in developing this next generation of wireless connectivity so that American consumers and our nation's economy enjoy the immense benefits that 5G will bring," FCC Chairman Ajit Pai said in a statement.

FCC rules force a shot clock on towns, making them respond to wireless companies requests for 5G antennas within 60 days. They also have a deadline of 90 days for new utility poles with 5G antennas. The rules set $270 annual fees for each antenna or pole and a $500 application fee per antenna, though this can be slashed if a wireless company seeks antennas in batches, or multiple ones at the same time, according to the FCC website on Wednesday.

Verizon was pleased. "Today's action by the Federal Communications Commission to accelerate small-cell deployment is another critical step toward making our nation's 5G future a reality, sooner than later," said Nicola Palmer, Verizon's head of wireless networks.

The "order will significantly boost 5G deployment by adopting common-sense guidelines, modeled on state legislation, that reduce the time and cost of small-cell deployments while accounting for legitimate local interests," Palmer added. "We would like to thank the FCC for demonstrating vision and determination … as we enter the 5G age."

Philadelphia wasn't so ebullient.

"Today's actions by the FCC ignore longstanding local authority to manage the public rights-of-way. The city has agreements in place for service providers to pay up to $3,000 per year per site with a 3 percent annual escalator, consistent with city ordinance. To incentivize development, the fee starts at $3,000 but falls to $250 to reflect economies of scale," Michael Carroll, the city's deputy managing director for transportation, said Wednesday after the FCC vote.

"Today, the FCC declared that service providers should be charged a flat annual fee of $270 per site, leaving the city's existing agreements and ordinance subject to judicial challenge," Carroll added. "The financial impact to the city could be substantial."

Santa Barbara Mayor Cathy Murillo said in a letter filed with the FCC that the rules "effectively give access to public property to for-profit companies to install their equipment and to sell their private services, while limiting the ability of jurisdictions to recover their costs through the collection of rents and fees for the use of their public right-of-way."

The new FCC rules make it impossible for towns to do what Doylestown Borough officials have done over the last year: force Crown Castle to pay the borough what they consider appropriate fees for the use of the public rights-of-way.

When Doylestown finally settled with Crown Castle in July, the borough won the right to reduce the number of poles as well as camouflage and relocate some of them. It also won a 5 percent share of the revenues for the services Verizon or other companies sell through some of those Crown Castle small cells and $750 a year for other antennas.

The Doylestown deal with Crown Castle — which will lease the small-cell antennas to Verizon and other wireless carriers — should be grandfathered, thus not jeopardized by the new FCC rules, Davis said. But other towns will miss out on a similar lucrative deal.